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Flashcards in Deck 19 Deck (21)

The annual gift tax exclusion per donee for gifts of a present interest is:



The maximum amount that can be transferred pursuant to a death tax-free is:



What is the exemption amount for simple trusts?

$300; allowed in the calculation of taxable income


Income distribution deduction is the lessor of:

Distributable net income (DNI) or the actual amount distributed to the beneficiary


Definition of a gift:

Every transfer of money or property, whether real or personal, tangible or intangible, for less than adequate or full consideration


Four items that qualify for unlimited exclusion from gift tax

1) payments made directly to an educational institution for a spouse's tuition; 2) payments made directly to a health care provider for medical care; 3) charitable gifts; and 4) Marital transfers


A fiduciary must file a return on Form 1041 if the estate has gross income of:

$600 or more for the tax year


The standard deduction for a trust or an estate in the fiduciary income tax return is:



Which fiduciary entities are required to use the calendar year as their taxable period for income tax purposes? (Estates and/or trusts)

Trusts must adopt a calendar year; Estates may choose the same accounting period as the decedent, or it may choose a calendar year or any fiscal year it wishes


Within how many months after the date of a decedent's death is the federal estate tax return (Form 706) due?

9 months


Generation-skipping transfer tax is imposed:

As a separate tax in addition to the gift and estate taxes


General rule to deduct administration expenses:

A statement must be filed with the income tax return stating that those deductions have not been taken on the decedent's estate tax return.


Alternate valuation date (estate tax) is the earlier of:

Date of distribution or 6 months after the date of death


When the creator is treated as the owner of the trust, it is referred to as what kind of trust?

Grantor trust


Martial deduction definition:

All items in the decedent's estate and transferred to the spouse


Distributable Net Income (DNI) =

Estate income - estate disbursements (includes capital gains); anything attributable to corpus not included


Form 1041

Annual Income Tax Return for Trusts and Estates


Tax year for estates is

Calendar year or fiscal year; "you can die anytime"


Tax year for trusts is:

Calendar year only; 12/31 is year-end


Nondiscretionary Expenses (bills you have to pay) include:

Medical expenses and administrative expenses


Discretionary Expenses includes:

Unlimited charitable deduction and unlimited marital deduction